Owner's retirement needs: Include an assessment of the owner's personal financial situation, showing the amount of investment in the business and income needs in future years.

How to identify, assess and declare a successor: State what types of leadership skills, education levels and other talents the business will need.

Ownership and management structure: Set out the ownership rights and business responsibilities of key family members and employees.

Critical path and timetable: A critical path of events is needed, ranging from the completion dates of educational requirements for potential successors to the transition date.

Communication plan: A communication strategy for other family, shareholders, employees, customers and professional advisors is also important.

Other aspects of the written retirement plan such as legal or tax procedures can be hammered out with professional advisors.

Revising Your Shareholders Agreement

Your shareholders agreement is critical, since it addresses so many core retirement issues:

division of ownership, power and share structure;

roles and responsibilities of shareholders;

composition of the board and voting rights;

framework for resolving shareholder disputes;

options in the event of death, disability, divorce and other unforeseen circumstances; and

buy-sell provisions.

In some cases, a retirement plan will require a new shareholders agreement.

Buy-Sell Agreements

Buy-sell agreements set out terms and conditions for acquiring and selling interests in the business. These agreements provide liquidity for the estate, and business continuity in the event of the death, disability or retirement of an owner.

A legal advisor and tax accountant should help determine the best form of buy-sell agreement for each business.

Insurance

Insurance is a specialized business tool. For example, under a buy-sell agreement, co-owned businesses can use insurance to finance the purchase of a shareholder's interests in the event of death or incapacity. "Key person insurance" helps compensate a business for any financial losses due to the death or disability of an essential person. Think about disability income replacement insurance for yourself as well.

Lining Up Financing Options

Traditional financing options for retirement include:

secured loans, based on hard assets;

subordinated debt, which is used when cash flow is strong; and

equity investments.

Increasingly, owners are also looking to a wide variety of insurance products to finance retirement and protect against illness. These insurance-based plans should be carefully scrutinized in advance by your advisors.

Revisit Your Plan Regularly

As you near retirement or the exit moment, you should revisit your plan to ensure it's on track. Here are some warning signs that it isn't:

Rigid, inflexible provisions not tailored to the people involved or changing circumstances

Lack of opportunity that causes key people to leave anyway

Poor communication of the plan

Selection of unqualified or unmotivated people

Failure to hold individuals accountable for goals and requirements

Why Are You Still Here?

It can be difficult for owners to leave the business they created. They may want to remain involved with the operations beyond the retirement date.

Researchers have found that transition to new ownership and management is most successful when the previous owners pursue other interests-or even start another business.

In the end, perhaps the most important retirement goal you can set for yourself is to take advantage of other opportunities life can offer.